You are correct. It pulls from both if they are a "premium member", but if they are just "registered members" it just pulls from the photo's uploaded from other users, which I have set as free images.
I appreciate your help on this.
Also, if anyone has or is trying to do this you will need to go to the paying user group, in my case it is "Premium Members" and click edit user group and scroll down to "User group Options" at the bottom and click "Yes" on the one that says
"Allow Users to have Member Groups (Sets whether or not permissions from the user's member (secondary) user group memberships are inherited or not)"
This will allow that user group to see "All" random images on the vB
index even though they have two user groups listed under their user name.
Took me forever to figure this out.
Now that it all works, I have to say "PhotoPost" is the number one photo sharing software in my book and I am in no way a coder, and very much a novice.